2003
PA Consulting Group to assume the management of the United Distribution Company on behalf of the Government of the Republic of Georgia
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08 May 2003
On May 8, 2003, PA Government Services Inc. (PA), part of the PA Consulting Group, signed an interim management contract with the Republic of Georgia, as represented by the Minister of State Property Management, and with the current management of the United Distribution Company. This contract provides to PA the right to manage the United Distribution Company for a period of approximately 18 months, with funding to be provided by the US Agency for International Development (USAID).
The United Distribution Company (UDC) was formed in 2002, as an amalgamation of several regional electricity companies. It is estimated to have approximately 660,000 customers, close to 5,000 employees and a service area covering 70% of the country, much of it being rural. It is also a company in very serious difficulty, characterized by dismal financial performance, huge payables, inadequate business systems, all of which combine to make the UDC unable to provide reliable electricity supplies to its customers.
In response to the urgent request of the State Minister of Georgia, Mr. Avtandil Jorbenadze, USAID agreed to finance this interim management contract as part of the US Government's foreign assistance program for Georgia.
The PA team, consisting of 23 individuals, supplemented by additional specialist expertise, will assume management control on May 13, 2003. For a period of approximately 18 months, the PA team will introduce a number of improvements in areas such as: (i) reorganization of the company; (ii) financial management and planning; (iii) metering, billing and collections; (iv) power supply and delivery; (v) human resources; and, (vi) regulatory and governmental affairs and compliance. By the end of this 18-month period, it is anticipated that the Government of Georgia will have selected a long-term private management contractor to take over the management of the UDC for an additional period of five years.
According to PA's Dean White, "When one looks at the UDC management contract, it is without a doubt a very daunting challenge. Its sheer size in the Georgian energy sector means that if the UDC performs poorly, the entire energy sector suffers. Thus, its performance must be turned around. With almost eight years of experience in Georgia and a dedicated staff of utility professionals on the PA team, we are confident that with the close involvement and support of the Government of Georgia, we can begin effectively addressing the web of problems facing this company and its staff. We look forward to getting started."
The UDC management contract is one of several activities now being implemented by PA in Georgia, all on behalf of USAID. In addition to the UDC management contract, PA is overseeing several other large programs included within USAID's recently announced Energy Security Initiative for Georgia, including hydropower rehabilitation, credit facility development, management of a social safety net program, and community development. PA's major partners in the Energy Security Initiative include MWH Engineering and Winrock International.
For more information, please contact:
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| Dean White |
| PA Consulting Group |
| 1750 Pennsylvania Avenue |
| Washington |
| 20006 |
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Tel: +1 213 689 1515 |
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Fax: +1 213 689 1129 |
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E-mail:
dean.white@paconsulting.com |
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Irakli Elashvili
PA Government Services Inc.
44-I Leselidze Street
Tbilisi, 380008, Georgia
Telephone: +(995 32) 92 14 86/7/8/9/90
E-mail: irakli.elashvili@pageorgia.ge
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Notes to editors
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